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New electricity law will worsen climate change impacts in Nigeria – Experts

By Ojugbele Omotunde

Renewable energy experts are sounding alarms about the potential negative consequences of the recently signed Electricity Act 2003 by President Bola Tinubu, warning that it could exacerbate the impacts of climate change in Nigeria.

These concerns are outlined in a report titled “Nigeria’s State of Power: Electrifying the Nation’s Economy” by Stears and Sterling.

According to the report, households and businesses in Africa’s largest economy have increasingly turned to fossil-fueled generators, resulting in an annual consumption of approximately $14 billion worth of fuel. This shift poses serious environmental and health risks to the nation.

Stears and Sterling pointed out that despite Nigeria’s abundant resources in oil, gas, hydropower, and solar energy, the country continues to grapple with significant power shortages. They expressed disappointment that only 4,100MW of the potential 13,000MW generated by existing power plants are currently accessible for distribution.

The report highlighted that the Electric Power Sector Reform Act of 2005, which had been in operation for 18 years, was effectively repealed with the signing of the Electricity Bill 2022 by President Tinubu. The new electricity statute encourages the 36 states to explore creative energy mix alternatives to address the supply gap.

One of the primary objectives of the act is to establish a renewable energy market that will attract investment, aligning with the recommendations of Brickstone Africa, an infrastructure advisory agency.

The report also proposed that states can diversify their energy generation mix by tapping into the abundant renewable energy resources available within their regions. This could be achieved through innovative approaches such as concessionary-based project arrangements or Public-Private Partnerships (PPPs).

Notably, the Act includes provisions for tax benefits and feed-in tariffs, ensuring a fixed price for renewable electricity injected into the grid. These incentives are aimed at promoting investments in renewable energy projects.

Under the new legislation, the Ministry of Power is mandated to develop an Integrated National Electricity Policy and Strategic Implementation Plan to guide the overall growth of the nation’s power sector. This plan must be updated every five years and published in a federal gazette.

Regarding the framework for preventing anti-competitive practices and ensuring a level playing field for all industry participants, Stears and Sterling emphasized the importance of adhering to these principles during the licensing, monitoring, and supervision of market participants.

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